The Tel Aviv Stock Exchange (TASE) Launches for the first time Series of Long dated TA-35 Index Derivatives TASE Expects This Measure to Provide a Solution to an Existing Market Need

Press Release
24/12/2017
 

​The board of directors of TASE’s Maof Clearing House has approved the launch of series of long dated TA-35 Index derivatives.

Following talks held with TASE members and market players, TASE believes that the launch of long dated derivatives will contribute to enhancing liquidity and will provide a solution to a real existing need for the various market players.

The long dated TA-35 Index derivatives will be for 15 months. New series of options and future contracts will be opened in March, June, September and December for 15 months. In the other months, as is the current practice, derivatives for 3 months will be opened. Consequently, at any point in time, there will be 7 monthly series being traded – 3 series for each of the three coming months and another 4 series for 6, 9, 12 and 15 months. This will be in addition to the weekly options that will continue to be opened, as is the current practice.

The opening of derivative series for 15 months will facilitate, at any point in time, trading in derivatives having a term to expiry of at least a year and will allow positions to be rolled-over, also for periods of a year.

TASE has identified several parties that might trade in long dated derivatives. Firstly, activity that currently takes place on the OTC market might shift to TASE. Next, there is a likelihood of “regulatory hedging” in respect to the insurance companies’ nostro portfolios, as part of the implementation of the Solvency II Regulations. Moreover, the launch of the new options might encourage the entry of new players who prefer to trade in “longer” derivatives than those currently in existence.

The launch of the long dated options requires technical arrangements to be made and these will be implemented in stages. Accordingly, the long dated future contracts will be launched first and launch dates of the long dated options will be deferred to a later time. 
 
The future contracts launch: On January 25, 2018, new series of TA-35 Index future contracts will be issued, on a one-time basis, for periods of less than 15 months. The new series will expire in June 2018, September 2018, December 2018 and March 2019. A series of TA-35 Index future contract for 3 months will be opened on the same date, as usual.

The options launch: On September 6, 2018, series of TA-35 Index options will be issued, on a one-time basis, for periods of less than 15 months. These series will expire in December 2018, March 2019, June 2019 and September 2019.